In the early days of the Internet, an hourglass turned over. The grains of sand counted down the moments until the old creative industries inevitably collapsed. Everyone knew content companies like music and publishing were screwed; they had to reinvent themselves to take advantage of the Internet or they would rapidly become obsolete. As they began to fail, we blamed them for being too stupid, too slow to innovate.

The Internet helped to end the old music & publishing industries. But we also hoped it would bring newer, more profitable models to fill the chasm. Unfortunately, the last decade has been rough for creators trying to scrape together a living through writing, music, film, and art. Digital downloads, subscriptions, and advertising have emerged as the new models we were looking for, but they’ve done little to stem the bleeding from lost physical sales.

Advertising has had a curious effect on the Internet. It has helped foster a culture which expects art, software, and other non-physical goods to be provided for free. This hasn’t exactly been a blessing for industries like the recorded music business, which has suffered immensely over the past 15 years.

The decline of the American music industry has been slow and tortured, filled with mistakes and awful press. But it’s not the stars who have suffered. As the music industry shrunk, it continued supporting its top artists who brought in the majority of the revenue. Midlevel artists were not so lucky. The middle class of the music industry can’t survive online without the support of the old majors, but the old majors are in no position to help. Asymmetry in the music industry has been around for as long as recorded music has, but the inequality between a star artist and a midlevel or below artist has become desperately large.

In the modern music industry, there are two classes: the stars, and the impoverished.

How did this happen?

The online social contract devalues creative works

The long tail does not raise the sales of creators much, but it does add massive competition and endless downward pressure on prices. Unless artists become a large aggregator of other artists’ works, the long tail offers no path out of the quiet doldrums of minuscule sales. — Kevin Kelly

There’s a new social contract online. The general idea is that musicians, writers, and filmmakers are expected to deliver their creative works free of charge to online culture at large. In exchange, every tweet, share, and download is a form of promotion for the artist.

Art has become advertising.

In theory this is actually good for the artists. After all, this strategy is incredibly effective for SaaS startups like Buffer. They release content for free, and in exchange receive qualified leads they can sell products to. This is how it’s supposed to work for artists, too—they release their work for free, and convert their new fans into merchandise and ticketing revenue. In practice, however, the only artists who can consistently reach a large enough audience for this to work are already stars.

Why doesn’t this model work for regular artists?

Competition is greater than at any other point in history

Our ability to reproduce and repeat performances allows me to listen on my laptop to hours of background music of the pianist Vladimir Horowitz (now extremely dead)…instead of the local Russian émigré musician (still living) who is now reduced to giving piano lessons to generally untalented children for close to minimum wage. Horowitz, though dead, is putting the poor man out of business.— Nassim Taleb, “The Black Swan”

Technology enables creative works to scale endlessly. An ebook like Fight Club can be copied onto every computer with Internet access in the world just as easily as it can be copied at one, with no additional cost to the owner of the computer. Initially, this book will spread through meshing with the highly subjective tastes of early influencers. But once the book has caught enough momentum it will begin to spread through contagion, in which success begets success and subjective tastes start to matter less than the number of Facebook likes. This is when the real inequality develops.

Industries that can scale this way become highly asymmetrical. A lucky few are able to take the majority of the pie, while the remainder fight over scraps. Just how bad is this inequality?

Princeton economist Alan Krueger measured the disparity in concert ticket revenue from 1982 to 2003 using Pollstar data. In 2003, the top 1% of artists received 56% of live performance revenue. 15% of total revenue was left over for 95% of artists to scrabble for.

Live performance is not the only place where revenue is wildly unequal in music. Modern musicians are in a desperate struggle against every single recorded artist in history, living or dead, along with every cover, remix, mashup, and demo released on Soundcloud, YouTube, FindMySong,Spotify, and all the other platforms where music can be discovered. And it’s all available for free.

Musicians are not unique in their struggle. The publishing industry is even more asymmetrical than the music industry. Artists of all kinds are engaged in competition with their peers, past and present, jostling for a place in the vanishing attention span of their customers.

But the future is not as bleak as it may seem. Artists will have to take on day jobs. We will need to become marketers, engaging in creative campaigns to spread our material. We will have to learn from startup companies, and we will have to create more work than ever before.

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